California "Mortgage Fraud Scam" May Be Tip Of The Iceberg, Says State Attorney General Jerry Brown


First came the subprime mortgage crisis; now comes the cases of alleged fraud.

Jerry BrownAn amazing story Tuesday out of Southern California where the state attorney general has busted an alleged mortgage scam that may have bilked thousands of SOCAL homeowners out of millions of dollars.

And, California Attorney General Jerry Brown told me, in some cases, signatures of homeowners were actually forged on the mortgage documents!

How it worked

According to the attorney general’s office, at least six companies operated by one family enagaged in “predatory lending” by pushing the alleged victims into “illegal and unconscionable loans.”

Brown blames this scheme on the worsening mortgage crisis, which, he says, is creating a number of “fly-by-night” operations.

Brown told me he has never seen anything like this–and the man was even once governor of California, so he’s been around a bit.

The alleged victims were often targeted because they lacked command of English. They were promised one fixed rate on a mortagage but, later in the day, they would be visited by a representative of one of the companies who often had forms with incomplete information.

They would promise that, once signed, the proper numbers would be inserted back at the office, Brown says. If the homeowner declined, says Brown, in some cases their signatures were forged, often with improper spellings of their names.

Many lost homes

Brown says the scheme robbed many homeowners of their homes because they could not afford the paymens.

Arrests have been made and more may be still to come.

Growing California Mortgage Scandal?

Brown thinks so. His office says that in the coming weeks, “Brown intends to bring additional legal actions, both civil and criminal, against other mortgage lenders and foreclosure consultants who are taking advantage of homeowners across California.”

Doubt this is the only state this is happening in!

Let us know if you have heard of such practices in YOUR state or community.

About Author

Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.


  1. I was ripped off in three different real estate deals in Chicago. These people prey on poor people to rip off. It is so blatant that they just rape the contracts. ALL people involved know eachother and have worked in this business for a long time. HUD, the FBI, the police,,, none of them will help in this scam. HUD always tries to act interested but it has come to my attention that they provided section 8 contracts and housing to con artist and swinders in Chicago. Most of the lending companies are based in California, they would give a loan without proper respas, 1003’s, etc… they gave a loan for $500K to a welfare mother with three kids. The broker would have a convicted felon find “targets” to dupe into false schemes and sell the section 8 properties he owned several times to un-suspecting people with low incomes and little experience in real estate. According to the HUD official, “they have alot of money now and will be difficult to prosecute.” Their scheme is SO illegal that it is easy to believe that even this HUD official is involved. A Chicago newspaper reportter named David Jackson was doing a story on this, a very good one and was ordered to “cease.” Why? Because this scam goes all the way to the top of government and all the way to the bottom of the barrel of scumbags and con artists. I am unfortunate to be ripped offf by these people but I wonder how many lives and families and children have been directly harmed by the greed of this corrupt industry???

  2. How impressive that Jerry Brown feigns concern. I have spent the past several years reporting a MASSIVE real estate fraud/theft operation in Fresno, CA – he has not once acknowledged me. Forged (verified by handwriting expert) documents, altered records, ID theft, illegal conversion of assets, even suspected homicide.
    Fresno’s District Attorney has prohibited reports of the operation – they went as far as to BLOCK my email address so I could not provide additional information.
    Senators, Attorney General – no response.
    Discrediting me seems to be one of the methods used to avoid looking into this. I believe I am being used as a scape goat for what this appears to be linked to – a 45+ yr citywide cover-up involving the city’s water system. Aside from empty speeches and promises, are there any agencies that actually DO investigate real estate theft/real estate fraud?

  3. Well it’s obvious that all the new laws, rules and regulation is structured and developed to the benefit of 2 parties, the client which is noble and letting only the big banks take over the mortgage industry. Well the question that rise, how will the mortgage bankers / correspondent lenders pay their loan officers more then what bank of America, Wells Fargo, Chase pay their loan officers and stay competitive with the big banks?

    The answer to that is something that lot of people are waiting for, and besides that everyone is anxious to see how things is going to fall in place, knowing that mortgage brokers and mortgage bankers loan officers are not a breed that enjoy the corporate way of doing business, and knowing that the big banks are not going to be hiring any new people due to the fact that they are going to be hammered with employment applications by loan officers, and that’s when crisis rise again and create more trouble in this industry.

    I see another wave of crisis for the mortgage industry that is coming, and this time it is going to really hurt and take little longer for everyone to adjust, also it’s going to reflect some unemployment and some financial crisis to some more people that are working hard and surviving out of today’s mortgage industry, the question is when is the crisis going to end for the people that are struggling to survive in today’s economy and decided not to leave the mortgage industry and decided not to work for the banks.

    I believe the answer to that, would be for the mortgage brokers and mortgage bankers to give more then what the big banks are giving to the public and to the real estate industry. It’s a simple philosophy give and you will get much more in return. We have set our path for 2011 strategy and the execution of our strategy will begin in January 15th of 2011. Our strategy will create opportunities for real estate agents to have more business and develop for them a strategy for continuous growth in return to have a massive bonding strategy between the real estate agents in our market with our loan officers in exchange for the value that is provided by the services and the strategies we bring to our industry. All we would like to ask for the loan officers, the mortgage brokers and mortgage bankers that are in the industry and they are facing some financial trouble or facing frustration of growth and development for their office or their company to join us on Facebook and join our company so we could put our hands together and promote what banks can’t promote, give the public and the real estate industry something that has never been provided and asking nothing in return.

    Our formula for success in 2011 is the way of conquering markets, it’s the new way to conquer this industry lets come together and turn this industry to our benefit and show the banks how hard it is going to be for them when we are taking their business away, and how much this industry is in a need for our breed of professionals.

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